Germany has done it again: UPC ratification halted

For many of us, the start of 2021 may feel like 2020 all over again. For the patent community in Europe, it feels more like 2017 - when the ratification of the Unified Patent Court (UPC) in Germany was stopped before. The UPC system would revolutionize the patent litigation procedure, including for cases in the tech space. 

Back then, a constitutional complaint against the first ratification had been filed and put the entire project on hold for a number of years. In the meantime, the UK has dropped out of the project. Finally in the spring of 2020 the German court ruled the ratification act unconstitutional. This was based on a formal point - the lack of a required majority in the legislative chamber. Many had thought that this would pave the way to a quick ratification because the act could be passed again quickly with the required majority. Consequently, the German government introduced essentially the same bill into the legislative process again, which was passed with the required majority (see earlier post German UPC Ratification 2.0 - Can the quick fix be the solution?).

With a careful read of the 2020 decision, one could, however, see that the court also had some substantive doubts about the UPC Agreement. These of course were not addressed with the second attempt of ratification. Not unexpectedly, new complaints were filed against the second ratification act. It now seems that these initial concerns have materialized. The German Constitutional Court has now asked the German President not to certify the ratification act, and, just like in 2017, the President will follow this request. 

It is too early to tell what the court will make of this and how long the delay will be. Needless to say, this looks like another blow to the project, which may be the final one. On the other hand, this development is a chance to eliminate the doubts that have been overshadowing this second ratification from the start. If the constitutional concerns can be eliminated, the UPC may ultimately benefit from this, despite a further delay. The key factor remains whether the industry remains committed to the project or whether the delays have caused companies to lose interest. For technology companies, the UPC could remain particularly interesting because its judgements would have broader geographical reach than is currently the case, while the uncertainties of a new court system may be easier to accept in a field where a multitude of patents cover individual products and companies thus have "more arrows in the quiver".